Allowability of Costs
Federal guidelines outline what types of costs are allowable (able to be charged to a grant or contract), and those that are unallowable (those that cannot be charged.)
All expenses charged to sponsored accounts must:
- Be allowable. Allowable expenses are reasonable and necessary to carry out the aims and goals of the project. Allowable expenses must be treated consistently and conform to any limitations or exclusions set forth in the relevant federal regulations (if applicable), the sponsored agreement, and the University policy.
- Be allocable. An expense is allocable if it is incurred solely to advance the work under the agreement or if it benefits both the sponsored agreement and other work of the institution, in proportions that can be approximated through use of reasonable methods.
- Be reasonable. A reasonable cost is one that a prudent person would have incurred under the circumstances prevailing when the purchase was made.
- Be consistently treated. Costs incurred for the same purpose, in like circumstances, must be treated consistently as either a direct or Facilities & Administrative (F&A) costs.
Costs incurred for common or joint objectives which cannot be identified specifically with a particular sponsored project should be treated as indirect costs. Examples include the cost of utilities, maintenance and operation, building and equipment use expenses, administrative costs, library costs, and student service costs. Most sponsored agreements include a percentage of the direct cost to cover these charges. This percentage is known as the Facilities and Administration rate (F&A) or the Indirect Cost rate.
If your award allows pre-award spending (not all do), then charges within the 90-day period before the start date of the award are allowable, but charges that are outside of that period are unallowable. If the award does not come in within 90 days, the school/center will need to cover the costs. In the same way, the charges that are outside of the award period of performance will also become the school/center responsibility.
Allowable and Unallowable Costs on Federal Awards
| Item | Typically Allowable as a Direct Cost to a Sponsored Award? | Prior Written Approval required from agency? |
| Administrative salaries
2 CFR 200.413(c) |
Yes, provided they are integral* to the project’s objectives. Examples: large, complex programs, such as program projects; projects with complex project management requirements, e.g., managing multiple subawards; projects that require making travel and meeting arrangements for large numbers of participants, such as conferences | Yes, the budget justification must explain integral nature of services to the project |
| Alcohol
2 CFR 200.423 |
Unallowable as an entertainment expense.
Allowable if necessary to the aim and scope of the project with prior sponsor approval |
Yes |
| Animals
2 CFR 200.453 |
Allowable for the acquisition, care, and use of experimental animals, contingent upon compliance with the applicable requirements of the Tufts Institutional animal Care and Use Committee (IACUC) | |
| Books and Journals
2 CFR 200.454 |
Generally, should be provided as part of normal library services and treated as F&A costs. May be direct charged if it is needed so often that a library copy is not sufficient. Explanation should be documented and address the following:
• Is the subject matter of the book or journal related directly to the project? • Is the book or journal associated with a specific research technique that will introduce efficiencies to the research and/or improve the quality of the results? • Can the book or journal be associated with the sponsored project with a high degree of accuracy? |
|
| Communication Expenses
2 CFR 200 App II |
Expenses that are used primarily for that project may be charged as a direct expense. Examples:
• Itemized long distance telephone charges for communication related specifically to the project • Communication devices used exclusively for conducting surveys • Telephones and PDAs used exclusively to manage a multi-site research project • Dedicated telephone lines set up to receive data feeds from the field • Hotel Internet fees during travel related to the project |
No. However explain and document why the specialized communication cost is necessary for the performance of the project. If the expense is anticipated, include it in your budget at the proposal stage |
| Compensation – Additional
2 CFR 200-430,440 |
Additional compensation can be paid if it is not for work already required in the normal course of employee’s job, and compensation amount is reasonable | No |
| Computers/Laptops
2 CFR 200.453, |
Items may be purchased if essential and use is clearly allocable to the project. | No, but budget justification should explain the essential & allocable nature of the devices to the project |
| Conferences
2 CFR 200.432 |
Yes, if event’s primary purpose is the dissemination of technical information. | No |
| Consultant/Professional Services
2 CFR 200.459 |
Yes budget justification should explain essential and allocable nature to the project | No |
| Donor Costs/ Subject Payments
2 CFR 200.453 |
Allowable for payment to volunteers or research subjects who contribute to the project | Yes |
| Dues or Membership Fees 2 CFR 200.452 | Can be charged to a grant if required for conference attendance or if it reduces the overall cost of attending. | Yes |
| Entertainment Costs
2 CFR 200.438 |
No, unless the cost is specific and has programmatic purpose to the project | Yes, budget justification must explain the programmatic purpose |
| Equipment
2 CFR 200.33, 200.439, 200.452 |
Yes. Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have prior written approval. | Yes, equipment over $5,000 must be itemized in the budget justification |
| Exchange Rates
2 CFR 200.440 |
Yes, subject to the availability of funds | No, unless the rate fluctuation results in the need for additional funding or the increased costs result in a change in the Scope of Work |
| Fringe Benefits
2 CFR 200.431 |
Allowable as part of overall compensation to employees in proportion to the relative amount of time/effort devoted by the employees. Must be consistent with university policy | No |
| Insurance
2 CFR 200.447 |
Insurance is treated as an F&A cost | |
| Local Meals
2 CFR 200.438 |
Yes, if costs have a programmatic purpose. Document the purpose of the meeting and why a meal is necessary. Retain a copy of the formal agenda and a list of external and internal attendees | No |
| Local Parking
2 CFR 200.473 |
Yes, if it benefits the project directly and there is a clear and reasonable business case | No |
| Memberships, subscriptions and Professional Activity | No, generally unallowable as a direct cost except when necessary to meet the technical requirements of the award or to ensure distribution of technical information / publish research results | |
| Maintenance & Repairs
2 CFR 200.452 |
Maintenance & repairs needed for equipment being used during the period of performance of a sponsored project may be allowable | Yes, budget justification must explain the programmatic purpose |
| Moving and Relocation Costs
2 CFR 200.464 |
Yes, if the proposal indicates that Tufts intends to hire a named individual who is essential to the project on a fulltime basis for a continuous period of 12 months. Unallowable if there was no indication in the proposal that the University intended to hire the individual. |
Yes, approved in the proposal |
| Office supplies
2 CFR 200.453 |
No, general office supplies that benefit common or joint departmental activities are normally not allowable as a direct charge. Specialized supplies may be charged as a direct cost if the use of the supply specifically and solely benefits the sponsored project | |
| Participant Support Costs
2 CFR 200.456 |
Stipends, subsistence, travel, registration fees, etc. for participants** in conjunction with a conference or training. Not allowable on research projects without an education or outreach component | Yes |
| Publication & Printing
2 CFR 200.461 |
Yes, publication costs can be charged even if incurred after the end of the performance period but before closeout | No |
| Recruiting Expenses
2 CFR 200.463 |
Can be charged for all candidates if recruitment is essential to and directly related to the project | Yes, budget justification must explain the programmatic purpose |
| Sabbatical Leave
2 CFR 200.431 |
At Tufts University, sabbatical leave salary costs are included as a component of the University’s fringe benefit rate and cannot be charged again as a direct cost to a grant | |
| Salaries and Wages
2 CFR 200.430 |
Compensation for personnel services, including fringe benefits, paid currently or accrued by the organization for employee services rendered to the project | Yes, budget justification must explain the programmatic purpose |
| Taxes (including Value Added Tax)
2 CFR 200.470 |
Yes, except taxes from which exemptions are available, special assessments on land, and federal income tax | No |
| Telephone Cost
2 CFR 200 App II |
Phone charges are generally an F&A cost. Toll calls may be a direct cost provided the cost can be specifically identified to a sponsored agreement | Yes, budget justification must explain the programmatic purpose |
| Training & Education Costs
2 CFR 200.472 |
No, general educational/training costs for employee development are a component of the University’s fringe benefit rate. May be allowable as a direct cost if incurred in support of, and can be associated with the sponsored project with a high degree of accuracy | |
| Travel
2 CFR 200.474 |
Allowable as a direct cost where such travel will provide direct benefits to the project | |
| Visas (short term)
2 CFR 200.463 |
Yes, if critical and necessary for the project. Long-term visa costs are not allowable as direct cost | No |
*Integral means the services are essential, vital, or fundamental to the project or activity. **Participant is defined as an individual who is the recipient of a service or training provided at a workshop, conference, seminar, symposium or other short-term instructional or information sharing activity funded by a sponsored project. A Tufts University employee may not be a participant.
Links & Resources
CFR PART 200 - Uniform administrative requirements, cost principles, and audit requirements for federal awards